"Big Banks" Bank of America Securities: The recovery of the domestic property market needs to rely on its own momentum, prefers Runhua

Bank of America Securities published a research report maintaining a constructive view on China's real estate industry, but believes that the recovery momentum has shifted from policy stimulus to a slower, self-sustaining recovery, which may be uneven. However, it is expected that the transaction volume in April will be significantly higher than the levels at the end of last year and in the first two months of this year, indicating a longer recovery cycle rather than a rapid cooling like last year.

In light of improving supply and demand dynamics, including a decrease in the number of second-hand homes listed, the possibility of a significant price correction in 2026 is low. It is expected that second-hand home prices in Shanghai, Shenzhen, and Beijing will stabilize in the second half of the year. Given the uneven recovery, investors may remain cautious in the short term.

The firm prefers China Resources Land (01109.HK) due to its investment properties having long-term growth potential, and is optimistic about China Overseas Development (00688.HK) and C&D International (01908.HK), which are expected to benefit from upgrading demand, believing that their earnings visibility for the fiscal year 2027 is better. The firm lowered the target price for C&D International from HKD 18.6 to HKD 17.2, maintaining a "Buy" rating. The target price for China Overseas Property (02669.HK) was lowered from HKD 4.6 to HKD 4.4, maintaining an "Underperform" rating.

The firm lowered the target price for ONEWO (02602.HK) from HKD 20 to HKD 19, maintaining a "Neutral" rating. The target price for POLY PPT SER (06049.HK) was lowered from HKD 37 to HKD 36, maintaining a "Neutral" rating